Wolfe Research told clients in a note on Monday that the industry is focused on the wrong risk surrounding Anthropic’s leaked AI model, which has been reported to deliver substantially enhanced cybersecurity capabilities compared with prior models.
Analyst Joshua Tilton described the model - reportedly called Mythos - as one with "the potential to ignite a machine speed cyberwar the likes of which we have never seen," framing the technology as a catalyst that could intensify offensive cyber operations.
Market commentary to date, Wolfe said, has concentrated on the prospect that Anthropic’s work could erode the pricing power enjoyed by incumbent security vendors. Tilton urged a different read: the more consequential danger is that threat actors will harness "offensive cyber capabilities... that will now move at machine speed," potentially outpacing defensive products designed for human-speed response.
Wolfe Research argued that this dynamic should favor higher, not lower, security budgets. As the note put it, "We don’t think anyone hears 'war is coming' and chooses to spend less on guns and ammo," and the firm characterized its base case as seeing "minimal negative impacts" to near-term spending. The report also allowed for the opposite outcome: customers could accelerate investment in security to shore up defenses.
Against that backdrop, Wolfe upgraded CrowdStrike to Outperform and set a $450 price target, pointing to the company's "brand, armory of tanks, F16s, and Black Hawks," a metaphor referencing its Falcon platform and broad suite of products. Tilton said he has "increased conviction in CRWD's ability to accelerate ARR growth this year," identifying that acceleration as a likely catalyst for the stock to outperform peers.
Wolfe expects Anthropic to make a formal announcement in early April. The firm also said that even a strong model release would likely "reinforce our view on the impending cyber arms race."
The note also prompted a separate product-focused paragraph aimed at investors evaluating CrowdStrike: an AI-driven screening tool evaluates CRWD alongside thousands of companies using more than 100 financial metrics and identifies stocks with attractive risk-reward profiles. The paragraph highlighted that the tool has previously surfaced winners such as Super Micro Computer (+185%) and AppLovin (+157%), and it offered readers the option to see whether CRWD appears in current strategies.
Key points
- Wolfe Research says investor attention should shift from pricing risk to the offensive capabilities Mythos could enable.
- The firm upgraded CrowdStrike to Outperform with a $450 price target, citing the company’s broad Falcon platform and product portfolio as advantages.
- The development affects enterprise cybersecurity spending and vendor competitive dynamics, with potential implications for ARR growth at security software providers.
Risks and uncertainties
- Timing and content of Anthropic’s formal model announcement remain uncertain; Wolfe expects an announcement in early April but actual details and impact could differ.
- Near-term spending impacts are unclear; Wolfe’s base case anticipates "minimal negative impacts" but a shift in customer behavior could produce different outcomes.
- Market reaction to the leaked model could still emphasize pricing pressure on vendors, an outcome Wolfe argues against but which remains a possibility.